Bitcoin edged higher on Monday as traders decided to buy its price dip following a brutal selling session in the week closing April 18.
The benchmark cryptocurrency surged more than 1 percent to reach an intraday high of $57,600 but remained well below its recently-established record peak of $64,899 (data from Coinbase) established last Tuesday. Traders pumped the token in the wake of Coinbase’s direct listing on the Nasdaq Stock Market, anticipating that it would make Bitcoin and other digital assets more popular among Wall Street investors. Coinbase is the largest cryptocurrency exchange in the US.
More bullish cues came from the March US Consumer Price Inflation report. It showed that inflation in the US rose to 2.6 percent in March against the expectations of a 2.5 percent spike. Meanwhile, core inflation also spiked by 0.3 percent month-on-month. Interestingly, the upside in inflation appeared from services, not goods.
…tends to behave bullishly against inflation fears. As the cost of services and goods increase, investors tend to secure their balance sheets with assets that could at least stay on course with the rising inflation. The US bond market remains a bad choice for its less than 2-percent yields. Therefore, investors have started pouring their capital into riskier markets, which benefits scarcer cryptocurrencies like bitcoin.
The solid fundamentals indicate that the ongoing crypto correction might exhaust at one point in time. This week tends to tell more given the technical structure presented in the chart below.
The BTC/USD exchange rate is near a confluence of two support levels. The first one is the 20-day moving average (the blue wave), and the other is an ascending trendline that constitutes an Ascending Channel. Bitcoin expects to rebound strongly after holding the double-layered price floor, with its primary upside target sitting at the Channel’s upper trendline. It is nearly $70,000.
On-chain data expect some resistance as Bitcoin attempts to log another record high. According to Whale Map, a high selling pressure lurks near the $58,000-level.
“A lot of whale wallet volume was happening at around $58k,” the data analytics portal noted. “This should be an area of struggle for Bitcoin. $56,274 and $55,172 are currently important supports that have to be respected for the uptrend’s continuation.”